Correlation Between Grazziotin and Banco Da

Can any of the company-specific risk be diversified away by investing in both Grazziotin and Banco Da at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Grazziotin and Banco Da into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grazziotin SA and Banco da Amaznia, you can compare the effects of market volatilities on Grazziotin and Banco Da and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Grazziotin with a short position of Banco Da. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grazziotin and Banco Da.

Diversification Opportunities for Grazziotin and Banco Da

-0.55

Correlation Coefficient

Grazziotin  Banco Da

Excellent diversification

The 3 months correlation between Grazziotin and Banco is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Grazziotin SA and Banco da Amaznia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco da Amaznia and Grazziotin is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Grazziotin SA are associated (or correlated) with Banco Da. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco da Amaznia has no effect on the direction of Grazziotin i.e., Grazziotin and Banco Da go up and down completely randomly.

Pair Corralation between Grazziotin and Banco Da

Assuming the 90 days trading horizon Grazziotin is expected to generate 1.93 times less return on investment than Banco Da. In addition to that, Grazziotin is 1.69 times more volatile than Banco da Amaznia. It trades about 0.02 of its total potential returns per unit of risk. Banco da Amaznia is currently generating about 0.06 per unit of volatility. If you would invest  6,351  in Banco da Amaznia on October 3, 2024 and sell it today you would earn a total of  2,244  from holding Banco da Amaznia or generate 35.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Grazziotin SA  vs.  Banco da Amaznia

Grazziotin SA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grazziotin SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Grazziotin may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Banco da Amaznia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco da Amaznia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Grazziotin and Banco Da

The main advantage of trading using opposite Grazziotin and Banco Da positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grazziotin position performs unexpectedly, Banco Da can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Banco Da will offset losses from the drop in Banco Da's long position.

The idea behind Grazziotin SA and Banco da Amaznia pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.